How much do big law partners make?

[Anonymous]

Based on comments I’ve seen here it seems so variable. I’ve talked to lawyers in real life who say that junior partners can actually make less than senior associates, but posters here all claim to make millions. Is that typical for more established partners?

[Anonymous]

It’s very variable. I’ve known partners making $400k and into the millions.

It sounds like you know that already though?

[Anonymous]

https://www.law.com/americanlawyer/2023/04/18/the-2023-am-law-100-ranked-by-profits-per-equity-partner/?slreturn=20230409173532

AmLaw 100 - ranges from $561,000 (100th ranked firm) to $7.5 million (1st ranked firm). This hides the fact that there is individual variation, as not all partners in the same firm make the same amount.

[Anonymous]

Anywhere from 400k to 40 million.

[Anonymous]

I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

[Anonymous]

So, a few things that might help you put this into perspective:

- Not all partners are equity partners, which is what you usually think of when you think of a law firm partner. In recent years, more firms have started naming "income" or "non-equity" partners. These individuals are called partners but they are more like counsel/associates in terms of their pay. Most of their income comes from their salary, and then they are eligible for bonuses. Income partners can make as little as 300k before bonus. Their bonuses are more similar to a senior associate or counsel bonus and will usually be based on billable hours.

- An equity partner is a co-owner in the firm and is usually compensated via a combination of base pay and bonus, which for partners is more like a profit payment -- as co-owners in the firm, they earn a percentage of the firm's profits. The bonus usually constitutes the majority of their pay and is why partner comp at most firms varies so much. It can vary year to year based on firm profits -- in a good year partners will make more, and in a bad year less, and this is much more true for equity partners than for associates/counsel, who are generally given a predictable bonus based on billable hours and seniority (thought they are sometimes given a special bonus on top of this if the firm had a really good year). It can also vary from person to person, as the vast majority of firms vary bonuses based on things like origination credit (the partner who brought in the client), billable hours (both their hours and sometimes also the total billables of the teams they oversee), seniority, and other factors. Usually there is a compensation committee that will make these determinations and it's generally more of an art than a science. Partner compensation can be hugely political within firms.

Which is why you see massive differences in pay from partner to partner, even within the same firm. There is a big difference in pay between income and equity partners, and then additionally a big difference between partners who have originated a lot of clients ("rainmakers") and those who mostly maintain relationships with existing clients ("maintenance" or "relationship" partners). There is also a question about shared origination credit. Traditionally, the most senior partner on a pitch team will get the origination credit, but the team may include several partners, including the partner who will wind up doing or overseeing most of the work for the client. This senior partner can sometimes be at a phase in their career where they no longer bill many hours at all, but their name and reputation is critical for bringing in new clients or expanding the scope of work with existing clients, and this can generate resentment among younger partners who do not or cannot originate new clients on their own, but have high billables and are responsible for keeping clients happy (a hard, demanding job). Many firms now are examine a shared origination credit to help more fairly allocate credit, and thus money, derived from specific clients.

[Anonymous]

For me, non-equity base comp was $425k-$545k (3 year stretch); equity has been $750k-$1.3mm (in 3rd year now).

[Anonymous]

Anonymous wrote:So, a few things that might help you put this into perspective:

- Not all partners are equity partners, which is what you usually think of when you think of a law firm partner. In recent years, more firms have started naming "income" or "non-equity" partners. These individuals are called partners but they are more like counsel/associates in terms of their pay. Most of their income comes from their salary, and then they are eligible for bonuses. Income partners can make as little as 300k before bonus. Their bonuses are more similar to a senior associate or counsel bonus and will usually be based on billable hours.

- An equity partner is a co-owner in the firm and is usually compensated via a combination of base pay and bonus, which for partners is more like a profit payment -- as co-owners in the firm, they earn a percentage of the firm's profits. The bonus usually constitutes the majority of their pay and is why partner comp at most firms varies so much. It can vary year to year based on firm profits -- in a good year partners will make more, and in a bad year less, and this is much more true for equity partners than for associates/counsel, who are generally given a predictable bonus based on billable hours and seniority (thought they are sometimes given a special bonus on top of this if the firm had a really good year). It can also vary from person to person, as the vast majority of firms vary bonuses based on things like origination credit (the partner who brought in the client), billable hours (both their hours and sometimes also the total billables of the teams they oversee), seniority, and other factors. Usually there is a compensation committee that will make these determinations and it's generally more of an art than a science. Partner compensation can be hugely political within firms.

Which is why you see massive differences in pay from partner to partner, even within the same firm. There is a big difference in pay between income and equity partners, and then additionally a big difference between partners who have originated a lot of clients ("rainmakers") and those who mostly maintain relationships with existing clients ("maintenance" or "relationship" partners). There is also a question about shared origination credit. Traditionally, the most senior partner on a pitch team will get the origination credit, but the team may include several partners, including the partner who will wind up doing or overseeing most of the work for the client. This senior partner can sometimes be at a phase in their career where they no longer bill many hours at all, but their name and reputation is critical for bringing in new clients or expanding the scope of work with existing clients, and this can generate resentment among younger partners who do not or cannot originate new clients on their own, but have high billables and are responsible for keeping clients happy (a hard, demanding job). Many firms now are examine a shared origination credit to help more fairly allocate credit, and thus money, derived from specific clients.

+1 none of our senior partners will leave. And with no age limitation, they have no incentive to do so as they continue to make $$$.

[Anonymous]

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

Got it. So is that the top 10% of partners perhaps? Rather, most big law associates are probably not looking at ultimately making $7M in later stages of career?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

Got it. So is that the top 10% of partners perhaps? Rather, most big law associates are probably not looking at ultimately making $7M in later stages of career?

The sizable majority of associates don’t come close to making partner. 7mm is, in my experience, for a fairly successful rainmaker. And they probably won’t clear that year after year. There will be highs and lows.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

Got it. So is that the top 10% of partners perhaps? Rather, most big law associates are probably not looking at ultimately making $7M in later stages of career?

Virtually no big law associates are ultimately looking at making $7M in one year at any point in their future. You're talking about an anomalous situation. The CPA upthread is likely talking about a small group of self-selecting partners at a handful of firms that have ANYONE making that much. Partner comp is much or often in the range of 600k-2m. I have known partners who have never broken the 1m mark, and others who have done it only a handful of times.

Also, who knows where this is all headed, as there are a lot of shifts happening in the industry. Consolidation, competition from non-traditional legal providers, including the Big4. If I were a newly minted big law associate right now, I'd... stay flexible and keep my eyes open. No guarantees. Pay off your loans before you make any other plans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

Got it. So is that the top 10% of partners perhaps? Rather, most big law associates are probably not looking at ultimately making $7M in later stages of career?

Virtually no big law associates are ultimately looking at making $7M in one year at any point in their future. You're talking about an anomalous situation. The CPA upthread is likely talking about a small group of self-selecting partners at a handful of firms that have ANYONE making that much. Partner comp is much or often in the range of 600k-2m. I have known partners who have never broken the 1m mark, and others who have done it only a handful of times.

Also, who knows where this is all headed, as there are a lot of shifts happening in the industry. Consolidation, competition from non-traditional legal providers, including the Big4. If I were a newly minted big law associate right now, I'd... stay flexible and keep my eyes open. No guarantees. Pay off your loans before you make any other plans.

This is very enlightening. I've often wanted to ask other attys re: compensation but have not for fear of being uncouth. I left my mid sized firm many years ago now for solo life (no regrets) but wonder if the difference in pay was that stark. I'd never have been a big law partner (I wasn't even in big law) but this is still enlightening.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am a CPA for a few downtown and they (my clients) make between 3M and 7M fairly consistently. Some do broach $10M+

That is insane! Wow.

So do most partners fall in the 3-7M range? And what are their ages?

NO. Most do not. PP has somehow cultivated the higher end of the range for clients.

Makes sense, because partners making that kind of money are more likely to need a CPA. Also if the firm does business in multiple states, the partner needs to file non-resident returns in each of those states.